Wayne LaPierre

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Ridicule Is Man’s Most Potent Weapon

April 28, 2021 by 5 Comments

Saul Alinsky‘s Rule Number 5 states, “Ridicule is man’s most potent weapon. There is no defense. It is almost impossible to counterattack ridicule. Also it infuriates the opposition, who then react to your advantage.”

Mike Spies of The Trace understands this very well and just unleased a torrent of ridicule upon Wayne LaPierre. Somehow – and I have my suspicions – he obtained the lost and unaired footage from a 2013 African safari that Wayne and Susan LaPierre took that was to have aired on Under Wild Skies. That show was hosted by Wayne’s former BFF Tony Makris and was sponsored by the NRA. I have been told that Makris and Wayne used the show to reward LaPierre loyalists with a paid-for safari in Africa.

The footage is part of an article that is running in both The Trace and The New Yorker.

The footage of LaPierre in Botswana first shows him walking through the bush dressed in loose-fitting safari attire and an NRA Sports baseball cap. He is accompanied by several professional guides and his longtime adviser, Tony Makris, a top executive at the N.R.A.’s former public-relations firm, Ackerman McQueen, and the host of “Under Wild Skies.” The heat, at times, causes LaPierre to sweat. As he walks, his wire-framed glasses slide down his nose. After a guide spots an elephant standing behind a tree, LaPierre takes aim with a rifle. As LaPierre peers through the weapon’s scope, the guide repeatedly tells him to wait before firing. LaPierre is wearing earplugs, doesn’t hear the instructions, and pulls the trigger. The elephant drops. “Did we get him?” LaPierre asks.

The guide at first says yes, but then, as he approaches the elephant, it appears that the animal is still breathing. The guide brings LaPierre within a few strides of the elephant, which lays motionless on the ground. He tells LaPierre that another bullet is needed. “I’m going to show you where to shoot,” the guide says. “Listen, hold your rifle—I’m going to tell you when. Just hold it up.” The guide pushes the rifle’s barrel skyward as other men involved in the expedition move around in the distance. “I’m going to point for you where to shoot. Just waiting for these guys.”

Needless to say, Bwana Wayne botches this and two more shots. Tony Makris is the one who has to deliver the final shot.

It appears that both Wayne and Susan are using custom Blaser rifles with engraved actions and beautiful wood that I was told a while back were billed to the NRA. I wonder what ever happened to them.

As the video makes clear, Susan is the better hunter and much better shot than Wayne. She is also much more excited by her trophy than is Wayne who looks kind of befuddled. You wonder if he isn’t just looking for a place to go and throw up.

The whole episode brings to mind that classic Hemingway short story The Short Happy Life of Francis Macomber. While Wayne didn’t run in the face of the elephant like Macomber did in the face of the lion, it took someone else to finish the job. Moreover, Wayne comes off as a bumbling incompetent and not the great white hunter in charge of an organization dedicated to preserving hunting and the Second Amendment.

I know this is coming from the Bloomberg supported The Trace. As I’ve said in the past, just because you don’t like the source doesn’t mean it isn’t accurate. Spies gets his information right because he knows he will be sued every which way if he doesn’t.

I hope to go to Africa in a couple of years to hunt plains game. Unlike Wayne, I will be paying for the trip myself. Also, unlike Wayne, I plan to get in a lot of shooting practice in advance especially from sticks. It appears that Wayne was not that familiar with his rifle and it shows. When you are given the chance for the hunt of a lifetime, you damn well ought to be ready.

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They Can’t Claim Ignorance Any More

April 18, 2021 by 3 Comments

The NRA Board of Directors has long relied upon the word of EVP Wayne LaPierre for virtually everything. If a disturbing matter was brought up to them, they, for the most part, would say something like, “Well, I talked to Wayne and he said blah, blah, blah.” They considered this as doing their duty of care as a Board member.

As I pointed out in my post on fiduciary duties, duty of care means to give “reasonable attention and care to providing oversight.” Under New York public charities law, that includes knowledge of the organization’s finances.

Over the last few days, I have listened intermittently to the hearings held on the NRA’s Chapter 11 bankruptcy. I have also read synopses of these hearings on other sites. Some of the things I heard had me shaking my head while shouting at the computer, “How could you not know?”

For example, Wayne LaPierre testified before the court that he had no knowledge of the consulting contract awarded to former CFO Woody Phillips and that he had only recently learned of it. The contract in question was for $30,000 monthly to run for four full years. The total value of the contract would then be worth $1,440,00. How can a CEO not know that his recently retired CFO just got a contract worth over $1.4 million?

The one thing I do believe that came out of Wayne’s rambling testimony is his acknowledgement that he didn’t inform the Board of his intention to seek bankruptcy before filing it. If he had, I believe more Board members would have reacted at the time like Judge Phil Journey saying “we didn’t authorize that.” Their ex post facto motion saying they authorized filing bankruptcy then and now is frankly nothing more than a cover garment.

On Friday I listened to live testimony from Wayne’s former BFF Tony Makris as well as AckMac CFO Bill Winkler. A deposition of former NRA CFO Woody Phillips was also read into the record with one NYAG attorney reading the questions and another reading Phillips’ response. The key thing that was continually pointed out by Makris and Winkler is that the vague invoices sent by AckMac were at the direct request of Wayne. This continued even after a new agreement was reached that stated the only deviations had to be in writing from Wayne as EVP. Wayne, of course, still continued with his way of not putting his wishes in writing. Greg Garman, one of the NRA’s attorney, pounded on AckMac’s Bill Winkler about ignoring the letter of the contract and going along with how things had been done in the past. I think this was a strategic mistake on his part as it opens the door to questioning similar vague invoices from Brewer, Attorneys and Counselors.

I should note here that Woody Phillips’ testimony primarily consisted of him saying, “I decline to answer based on the privilege accorded me by 5thamendment of the US Constitution.” The one thing I can say about that is that you can’t be accused of perjury if you always take the Fifth.

As I said in the headline, the NRA Board of Directors cannot claim ignorance any longer. The beauty of WebEx is that it does a good job of capturing who is participating or listening in to an event. In this case, I saw reporters such as Danny Hakim of the NY Times, Mark Maremont of the Wall Street Journal, and Stephen Gutowski of the Free Beacon. I also counted at least six Board members listening in. They included Carrie Lightfoot, Anthony Colandro, Joel Friedman, Linda Walker, Howard “Walt” Walters, and Judge Phil Journey (who I expected to listen in). There may have been more as there were people who logged on by phone and not by computer.

My point is that after multiple days of testimony and over 600 documents, pleadings, exhibits, motions, and replies, it is impossible for anyone on the Board to say they don’t know what is going on. If they do, then they need to resign.

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NRA Bankruptcy Hearing

April 8, 2021 by 1 Comment

The US Bankruptcy Court for the Northern Texas District is holding a live hearing on the NRA’s bankruptcy petition today. You can watch it live using this link: https://us-courts.webex.com/webappng/sites/us-courts/dashboard/pmr/hale

I believe this is the third day of the hearing and the witness is NRA EVP Wayne LaPierre.

Wayne does not make a good witness. The judge has had to admonish him a dozen times or more to limit his answer to the question asked. His own attorney has instructed him to just answer “yes or no” when asked that kind of question. On virtually every other answer, the attorney asking him the question has to ask the judge to strike part or all of the answer as being non-responsive and Judge Hale is sustaining that objection.

I believe every NRA Board member needs to be watching Wayne’s testimony. There are a few that I’ve noticed listed in the WebEx as being online. Given what I’ve seen so far, board members need to be asking themselves this question: Is it or is it not time for Wayne to retire?

I know what my answer is.

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Wayne And DiFi Have A Symbiotic Relationship

March 12, 2021 by 3 Comments

I know this will either sound like heresy or cynicism but what would Wayne LaPierre and Dianne Feinstein do without one another?

Think about it.

Now that Feinstein has reintroduced her perennial assault weapons ban bill, Wayne will be able to send out hundreds of thousands emails and fund raising letters saying he needs the money to fight “Feinstein’s gun grabbing.”

Conversely, Feinstein will be able to use Wayne and the NRA as her personal whipping boys calling them “obstructionist insurrectionists” to both fund raise and to seek support for her bill.

Behind closed doors where no one can see either of them together, I would not be surprised to find out that they have a cordial relationship. Both are Beltway insiders who have been in DC for long, long time. Wayne became Executive VP in 1991 and Feinstein was first elected a year later in 1992.

Of course, that is just speculation but it is hard to see one existing without the other.

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Fiduciary Duties And The NRA Board

March 9, 2021 by 3 Comments

The term “fiduciary” is bandied about without much explanation or definition. That said, it is a critically important to understand what it means when it comes to an organization.

Investopedia defines it this way:

A fiduciary is a person or organization that acts on behalf of another person or persons, putting their clients’ interest ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other’s best interests.

While they are talking about a person who handles your finances, it is equally applicable to anyone who serves on the board of a non-profit like the National Rifle Association.

The website Charity Lawyer puts it this way when talking about the fiduciary responsibilities of a board member of a non-profit organization.

The board collectively, and directors/trustees individually, owe fiduciary duties to the nonprofit organization they serve. In essence, exercising fiduciary duties means that board members have a duty to act with care and in the best interest of the organization and remain loyal to its mission, as opposed to acting in their own interest or the interest of the CEO/Executive Director they supervise. (emphasis added)

So what are the fiduciary duties of a board member?

Under New York law a board member has three fiduciary duties: the duty of care, the duty of loyalty, and the duty of obedience. To assist new or potential nonprofit board members, the Charities Bureau publishes a booklet outlining what these mean. Using their words plus others let’s take them in order.

Duty of Care

The duty of care mean that board members should give give reasonable attention and care to providing organizational oversight. There is no precise definition of what is meant by reasonable but it should include, at the minimum, that members attend board meetings, they read the reports, and that they have knowledge of the organization’s finances. New York says that “directors must act in “good faith” using the “degree of diligence, care and skill” which prudent people would use in similar positions and under similar circumstances. (Remember the NRA still operates under NY law because the Board in 1992 ignored the warnings of Director and law professor Joe Olson.)

Among the item mentioned by the Charities Bureau on duty of care include a whistleblower policy, that the minutes reflect dissenting votes, that there is a clear process for major obligations, and that monthly financial reports are reviewed by board members.

I would say that Oliver North and Richard Childress were exercising the duty of care when they expressed concerns about the enormous legal billings from William Brewer III.

Duty of Loyalty

The duty of loyalty is owed to the organization meaning that directors are mandated to work in the interests of the organization and not their own self-interest. While the NRA does have a conflict of interest policy and disclosures are made, I have to wonder if it is anything more than lip service when someone like a Marion Hammer receives hundreds of thousands of dollars annually.

Charity Lawyer notes:

The fiduciary duty of loyalty of board members is the responsibility to act in the interests of the non-profit, those it serves, and those donating funds for operations, as opposed to their own self-interest…

It can also be said that board members have a duty not to act in the personal best interest of the non-profit CEO (lead staff member) where that interest conflicts with the nonprofit’s best interest. Hiring the CEO, setting the salary, and providing oversight and accountability of such CEO, is among the most important responsibilities of a non-profit board.

The duties of care and loyalty are the basics of all fiduciary responsibilities. The law recognizes what is called the “business judgment rule”. This protects board members if they exercise these two duties with diligence and prudence as courts have held.

I came across this from the major law firm IceMiller LLP with regard to the fiduciary duties when dealing with an insolvent or near insolvent corporation. While the NRA asserts it is far from insolvent, they are, however, in Chapter 11 bankruptcy proceedings.

Applying the business judgment rule, courts will ordinarily not scrutinize corporate decision-making if the decision was made through a valid exercise of the board’s business judgment. Essentially, corporate fiduciaries who act in good faith, make informed decisions, and do not personally benefit from their corporate actions can rest easier knowing their actions will not be scrutinized after-the-fact with the benefit of hindsight. The business judgment rule facilitates prudent risk-taking and forgives reasonable mistakes in judgment.

A recent interview that Michael Bane had with MidwayUSA’s Larry Potterfield brought something to mind. When Michael asked him about the NRA’s turmoil, Mr. Potterfield insisted that it was in fine shape and there wasn’t really any turmoil because that is what Wayne LaPierre assured him personally.

Think about that if you are a director and not merely a contributor like Mr. Potterfield. Would a court hold that the business judgment rule applied and that you fulfilled your fiduciary duties to make an informed decision if you merely relied on the assurances of Wayne LaPierre in the face of all the other contradictory information out there? I will get into more specifics in a moment.

Duty of Obedience

The duty of obedience means that the board has a fiduciary responsibility to ensure that the organization is abiding by its stated mission and is complying with all state and federal laws. New York goes further and includes abiding by its internal governance documents and policies. In this case, that would mean the NRA bylaws and its internal governance documents requiring board approval for major contracts such as that with Brewer, Attorneys and Counselors.

The NRA’s stated mission on its IRS Form 990 says:

Firearms safety, education, and training, and advocacy on behalf of safe and responsible gun owners.

You may remember that US District Court Judge William Campbell, Jr. allowed David Dell’Aquila’s class action lawsuit against the NRA over misuse of donor fund to continue. He did dismiss it against Wayne LaPierre and the NRA Foundation but found that the expenditures of the NRA for Wayne’s clothing and trips and Brewer’s legal fees may not have been in furtherance of the NRA’s mission. That suit is on administrative hold while the bankruptcy is still ongoing.

NRA Bankruptcy and Special Meeting

The Board of Directors is holding a called Special Meeting this coming Sunday, March 14th, in Dallas, Texas. It is widely assumed that one of the action items will be an explicit ex post facto approval of the bankruptcy filing.

The sole purpose of the meeting is to provide a briefing to the Board regarding the NRA’s reorganization plan and the legal matters overseen by the Special Litigation Committee, and to take any necessary action directly related to those matters.

Judge Phillip Journey, a Kansas state judge and NRA Director, has asserted, correctly in my opinion, that the Board was kept in the dark about the plan to declare bankruptcy. The formation of the Special Litigation Committee never mentioned a planned bankruptcy as he told Stephen Gutowski of the Free Beacon.

Journey said he had voted to support the committee, but had no idea the group’s leadership and legal advisers had planned to go into bankruptcy. He disputed NRA filings that claimed board members were properly informed. Those filings were signed by embattled executive vice president Wayne LaPierre, who was not present at the meeting when the committee was discussed, according to Journey. The Kansas jurist believes the law has been violated and he has a duty to report it to the court.

“It certainly was a fraud perpetrated on the court,” Journey said. “I told them all when I got on the board, ‘Look, I’m a judge. I’m a mandatory reporter. Whatever we do, we got to be on the up and up.'” 

I believe Judge Journey not only recognized his fiduciary duty of care but his duty as a officer of the court when he filed his Motion for an Examiner. He followed President Ronald Reagan’s dictum – “trust, but verify” – when it came to assurances from LaPierre and William Brewer. He looked at the New York Attorney General’s dissolution suit and recognized that there was too much there to just pass it off as a vendetta against the NRA.

The leads me to the the US Trustee’s filing in the bankruptcy case objecting to the appointment of William Brewer and his firm as “special counsel”. For those that don’t know, the US Trustee is an officer of the court whose primary rationale is to “promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders–debtors, creditors, and the public.” In other words, their job is to protect the process so it isn’t abused.

The US Trustee strongly objected to the appointment of Brewer, Attorneys and Counselors, as a special counsel to the NRA in the Chapter 11 bankruptcy proceedings. They assert that the services provided by Brewer do not fall within the constraints of bankruptcy law and that it has “divided loyalties and conflicts of interest.”

They go on to add:

These disqualifying conflicts are compounded by BAC’s failure to disclose them in the Application and by BAC’s failure to disclose all of its pre-petition compensation

Among the things the US Trustee asserts that Brewer did not disclose were the family relationship between Brewer and the McQueens, the allegations against the firm’s billing in two cases in which he was counsel (NYAG and Oliver North), and failure to disclose that Brewer himself was precluded from participating in any of the AckMac cases by the US District Court for Northern District of Texas. The Trustee said it shouldn’t be their responsibility to “ferret out” complete disclosures. This failure to make disclosures were grounds enough to prevent Brewer and his firm from serving as special counsel.

They detail what they call “adverse interests” against the estate. In other words, work that Brewer is doing that is not in the interest of the creditors nor in the real interests of the NRA as an organization. This is really the meat of their objection:

These adverse interests include:
a. potential claims by the Debtors’ estates against BAC for fraudulent conveyance based on allegations of billing improprieties raised by a former NRA president, a First VP, four members of the NRA’s Board of Directors, and the NYAG Action;
b. conflicted loyalties BAC may have between its own interests and those of the NRA in the NYAG Action, as well as in an action the NRA brought against its former president, Oliver North, in which Mr. North alleges he suffered retaliation from the NRA leadership when he raised concerns over BAC’s legal fees (the “Oliver North Action”);
c. conflicted loyalties BAC may have in the NYAG Action and generally between the interests of the NRA and those of Mr. LaPierre, based on BAC’s prior representations of Mr. LaPierre, and the steps Mr. LaPierre is alleged to have taken to stonewall internal inquiries regarding BAC’s fees; and
d. conflicted loyalties BAC may have because Ackerman McQueen is adverse to the Debtors in at least three lawsuits for which BAC is sought to be retained to represent the Debtors, when BAC’s named partner is married to the sister of Ackerman McQueen’s CEO.

The Board of Directors need to bear in mind that the US Trustee, despite wild accusations by Brewer and others with sweetheart deals, is independent and does not have an axe to grind. The US Trustee is neither anti-NRA nor pro-NRA but rather is pro-process and keeping it equitable for all involved.

So when doing their fiduciary duties of care, loyalty, and obedience, the Board of Directors should be asking themselves these questions.

Have I done my duty of care if all I’ve done is accept the assertions of Wayne LaPierre, William Brewer, and the Special Litigation Committee?

Am I performing my duty of loyalty to the members, the donors, the Second Amendment, and to the core values of the NRA?

Have I as a board member really overseen the actions of the CEO in the name of the organization or did I just go along?

Did I confuse my duty of obedience to the NRA with obedience and loyalty to certain individuals?

Will I be protected by the “business judgment rule” if I merely accepted the word of LaPierre and Brewer without going any further?

Finally, am I liable for a breach of fiduciary duties and what happens if I am?

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Judge Says Time To Act Like Adults

February 18, 2021 by 2 Comments

US District Court Judge Joe Fish has ordered mandatory mediation in the case between the NRA and AckMac that is pending in US District Court for the Northern District of Texas. He has told all parties that they have 30 days to set a mediation date or the mediator will do it for them.

The named parties shall be present during the entire mediation process and each party which is not a natural person must be represented by an executive officer (other than in-house counsel) with authority to negotiate a settlement (the authority required shall be active, i.e., not merely the authority to observe the mediation proceedings but the authority to negotiate, demand or offer, and bind the party represented). Counsel and the parties shall proceed in a good faith effort to try to resolve this case

As I read that, it means the both Wayne LaPierre and Revan McQueen must be present for the entire proceedings.

To make sure they play nice, Judge Fish has said he will order sanctions if the parties involved don’t “comply in good faith.”

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The Lawsuit That Keeps On Giving

February 18, 2021 by 5 Comments

The lawsuit and counter-lawsuit between the NRA and Ackerman McQueen is the lawsuit that keeps on giving. Reading the amended complaint filed yesterday by Ackerman McQueen is like reading about one of those Hollywood celebrity divorce cases but only better.

I give you the first three sections of AckMac’s “SECOND AMENDED THIRD-PARTY COMPLAINT AGAINST WAYNE LAPIERRE & THE NRA FOUNDATION, INC.” The Complementary Spouse said to me when I started snorting that it must have been funny.

This Third-Party Complaint arises from a series of ethically questionable
undertakings by the NRA through its longtime leader Executive Vice President and CEO, Wayne LaPierre (“LaPierre”). As a result of his authoritarian management style, love of money and power, and deep personal paranoia, today, LaPierre has reduced the NRA to a cult of personality as he continues to waste membership funds on media stunts and serial litigation with only one purpose: to save his own skin.

Through the intricate financial arrangements he constructed over decades with very little oversight from the NRA Board of Directors or other executives, LaPierre was able to obtain millions of dollars in personal benefits by keeping vendors and the NRA’s own accounting
department in the dark about his personal spending. As the gathering storm clouds of a possible investigation by the New York Attorney General (“NYAG”) started to form in 2018, LaPierre became concerned the details of his financial adventurism may come to light.

LaPierre sought assistance from lawyer/media-darling, William A. Brewer III (“Brewer”), and his law firm/public-relations firm, Brewer Attorneys & Counselors (the “Brewer Firm”), who together with LaPierre’s Chief of Staff, Joshua Powell (“Powell”), formulated a plan
to pin all liability on a convenient scapegoat, deflect media attention from LaPierre’s malfeasance and failed NRA programs, and maintain LaPierre’s domination of the NRA. Many of the resulting actions were made possible by LaPierre’s paranoia and guilty conscience, as he repeatedly proclaimed that Brewer was the only one who “could keep him out of jail.” By fantastic coincidence, Brewer determined that it was AMc—a company owned by his own father-in-law— who could be blamed for all of the NRA’s malfeasance and financial woes. In return for deflecting the spotlight from LaPierre, Brewer was given free rein to reap a financial windfall in exorbitant attorney fees, displace his father-in-law’s company as the public-relations firm for the NRA, and set up AMc as the perfect “fall guy.”

It was the “lawyer/media-darling” characterization of William Brewer III that had me in stitches.

While all of this is somewhat humorous to read, the sad thing is that from everything I’ve heard that Wayne LaPierre is paranoid and let Brewer be his “Rasputin” in an effort to save his own skin.

The ones to suffer from all of this will not be Wayne, Bill Brewer, or AckMac. It will be the ordinary NRA members who gave their hard-earned monies to the organization in order to protect their God-given right to self-defense as enshrined in the Second Amendment. Just when it is needed most, the NRA’s attention is on its series of lawsuits against AckMac and its bankruptcy stunt.

You can read the whole complaint here.

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“She Works Hard For The Money”

February 16, 2021 by 3 Comments

The latest filings in the NRA’s bankruptcy case contain a treasure trove of information. This is especially true for the NRA’s statement of financial affairs. It goes well beyond a mere balance sheet and includes a complete list of payments and distributions to insiders. Insiders would be the officers of the NRA as well as all members of the Board of Directors.

Reading through the list, most of the payments are recruiter payments. While I might quibble on whether or not directors or their organizations should be compensated for bringing in new members, it is a relatively minor thing and the amount of money was not material (using an accounting term).

Bearing in mind that 2020 was a horrible year, financially and otherwise, for many people, there is one person who did rather well in 2020.

Marion Hammer.

Ms. Hammer received $246,500 in direct payments for “consulting services”. In addition, she received another $183,600 in indirect payments made to United Sportsmen of Florida for a “consulting agreement.” (See pages 53 and 54 of the NRA’s filing.)

As Donna Summer sang, “She works hard for the money.
So you better treat her right.”

Being Wayne LaPierre’s No. 1 defender and attack cat (she is a cat person) is hard work. He must have thought so which is why she got $430,100 of member’s money in an effort to treat her right.

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NRA Bankruptcy Updates

February 8, 2021 by 5 Comments

In the last week and half there have been a number of updates in the NRA’s Chapter 11 bankruptcy case. I will take them in order.

First, there was a debtor’s motion (the NRA) to allow Brewer, Attorneys and Counselors, to serve as special debtor’s counsel in the case. While the entire filing is 53 pages long, here are some excerpts. It should be kept in mind that the NRA has retained Patrick Neligan of Neligan LLP as its bankruptcy specialist attorney. Mr. Neligan has been practicing high-level bankruptcy law for over 35 years.

BAC and its attorneys are well-positioned to handle these matters for the Debtors because BAC has accumulated a reservoir of knowledge that could not be efficiently offloaded to, or replicated by, substitute counsel.

One way of looking at Brewer’s statement is that they know where the bodies are buried. I don’t think that is their intention but it could be read that way and they are needed to keep them buried.

In 2020 and in 2021, BAC’s standard hourly rates were as follows:
Professionals 2020 Hourly Rates
Founding Partner, William A. Brewer III $1,400
Partner $700-$900
Associate $275-$600
Consultant/Analyst $250-$725
Investigator $250-$350
Public Affairs $375-$800

Are their fees capped?

Did you agree to any variations, or alternatives to, your standard or customary billing arrangements for this engagement?
Response:
Yes. For one of the matters, BAC agreed not to seek fees for its professionals’ time inexcess of $100,000.10 In addition, BAC represents the NRA in another matter pro bono. Otherwise, BAC has not agreed to any variations or alternatives to BAC’s standard or customary billing arrangements. BAC’s engagement by the Debtors in connection with the Debtors’ bankruptcy cases is to serve as special counsel to the Debtors in the litigation that began PrePetition and other related matters BAC has been handling for the Debtors, as well as to assist Neligan LLP (lead counsel to the Debtors) during a transition period after the filing of the chapter 11 cases in order to facilitate the quick, efficient handling of matters drawing on BAC’s institutional knowledge.

In other words, with regard to one aspect of the case they will limit their fees as per agreement to $100,000 but after that the sky is the limit.

Remember that the bankruptcy filing has put many of the NRA’s other cases on hold so Brewer, Attorneys and Counselors has got to make their money somehow.

The Special Litigation Committee of Carolyn Meadows, Charles Cotton, and Willes Lee think having Bill Brewer involved is just dandy and they are all for it. Then again, they pretty much do as they are told by Wayne LaPierre.

Moving on, a mailing list of all additional creditors of the NRA was filed with the court on Monday, February 1st. Included in that 247-page list was the NRA Foundation. It should be remembered that most of the firearms in the National Firearms Museum and the National Sporting Arms Museum are not property of the NRA. Rather, they are on loan from primarily the NRA Foundation as that was to whom they were gifted by donors.

In a February 2nd report by Reuters on the latest hearing in the case before Bankruptcy Judge Harlin D. Hale, attorney Patrick Neligan denied the Chapter 11 filing was in bad faith.

“This is not a bad faith filing and we look forward to using Chapter 11
to resolve litigation and to move forward to emerge out of this
bankruptcy as a company domiciled here in Texas,” Neligan said
during Wednesday’s hearing.


The question of whether the NRA filed the bankruptcy in good faith could arise if the judge is asked to dismiss the case.

Judge Hale did ask both the NRA and the NY Attorney General’s Office to scale back the rhetoric and treat this as “a regular bankruptcy case.”

The US Trustee in the case appointed an Official Unsecured Creditors Committee consisting of five members. The Pension Benefit Guaranty Corp. was appointed the interim chair of the committee. As seen in the screen shot below, two of the committee appointees will probably cause a bit of consternation in Fairfax as well as in the offices of Bill Brewer.

I sincerely doubt that either AckMac or David Dell’Aquila are going to roll over and play dead for Wayne and the NRA.

Finally, in an interview posted today in FreeBeacon.com by Stephen Gutowski, Mr. Dell’Aquila says he will be pushing for a court-appointed trustee to oversee the NRA’s operations.

“We’re going to definitely do a motion for a trustee,” Dell’Aquila said. “I would not be surprised if the majority of the other creditors don’t join or do a similar thing.”

The article goes on to note that the court could appoint a trustee and that such a trustee would have broad powers. That trustee could “displace” the current leadership and the board. Moreover, the trustee would have the fiduciary duty to act in the best interests of the creditors and could go after Wayne and others for misuse of the NRA’s money for personal expenses.

“It’s in everybody’s best interest to get a trustee in there, certainly from the creditors’ point of view, and, I would argue, even for the five million members because every dime that they waste in frivolous litigation is a dime less that could go to the core mission,” Dell’Aquila said.   

As might be expected, attorney Bill Brewer who had previously dismissed the idea of a trustee back in January expressed his disappointment that Dell’Aquila was on the committee.

“The NRA is disappointed that a disgruntled individual who has filed frivolous claims against the Association is appointed to the committee,” Brewer told the Free Beacon.

Dell’Aquila’s attorney Elliott Schuchardt said that even with some of the defendants dismissed in Dell’Aquila’s class-action suit, the remaining claim against the NRA is worth $64 million potentially making it the largest creditor.

“We think there’s enough evidence of fraud here that we can make a good faith argument to the bankruptcy court judge that somebody else should be running the NRA,” Schuchardt said. 

I have always held that this bankruptcy filing was a gamble. Wayne and Brewer are too clever by half and I think the result will not be to their liking.

There is another hearing scheduled in the case for Wednesday, February 10th by WebEx. I’m sure we will hear something more then.

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Wayne’s Letter To The NRA Board

January 16, 2021 by 5 Comments

An email went out at 4:01 pm EST this afternoon from NRA Secretary John Frazer to the Board of Directors announcing the bankruptcy filing and plans to reorganize in Texas. According to the time stamp on the bankruptcy filing, it was filed at 2:48 pm CST or less than 15 minutes earlier.

The email repeats much of what was reported in the press release.

Dear Board of Directors:

I am pleased to announce some exciting news about the NRA. 

The NRA announced it will reorganize the Association as a Texas nonprofit to abandon the corrupt political and regulatory environment in New York. This action will ensure our continued success as the nation’s leading advocate for constitutional freedom.

To facilitate the reorganization, the NRA and one of its subsidiaries filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. As you may know, chapter 11 proceedings are often utilized by businesses, nonprofits and organizations of all kinds to streamline legal and financial affairs. 

Subject to court approval, the NRA’s new strategic plan involves “dumping New York” and reincorporating the Association in the State of Texas – home to more than 400,000 NRA members and site of the 2021 NRA Annual Meeting being held in Houston.

As many of you have observed, New York is no longer a welcome home to our Association, as its leaders have demonstrated their hostility to the constitutional freedoms in which we believe. Our filing today allows us to wisely seek protection from New York officials who illegally weaponized the powers they wield against the NRA and its members.

The NRA is not financially insolvent. In fact, this move comes at a time when the NRA is in its strongest financial condition in years.

The Association will continue with the forward advancement of the enterprise – confronting anti-Second Amendment activities, promoting firearms safety and training, and advancing public programs across the United States. No immediate changes are expected to the NRA’s operations or workforce.  

The reorganization aims to help the NRA streamline costs and expenses, organize various litigation matters that involve related facts, and realize other financial and strategic advantages.

By exiting New York, the NRA abandons a state where elected officials have weaponized legal and regulatory power to penalize the Association and its members purely for political purposes.

The Battle in New York

As you will recall, in summer 2018, New York Attorney General candidate Letitia James vowed that, if elected, she would use the powers of her office to investigate the NRA. Without a shred of evidence supporting her claims, James called the Association a “terrorist organization” and a “criminal enterprise.” As promised, she commenced an “investigation” upon being elected to the Office of NYAG and, predictably, filed a lawsuit seeking to dissolve the NRA just prior to the November 2020 national election.

In response to the anti-freedom actions of the NYAG, the NRA filed a lawsuit in August 2020 against the NYAG similar to its lawsuit against New York Governor Andrew Cuomo and the New York State Department of Financial Services, filed in 2018. The NRA pursues the defendants for attempting to “blacklist” the organization and its financial partners in violation of their First Amendment rights. The NRA will continue those legal actions.  

I firmly believe this strategic plan represents a pathway to opportunity, growth and progress. One important part of the plan is reincorporating in a state that values the contributions of the NRA, celebrates our law-abiding members, and joins us as a partner in upholding constitutional freedom. This is a transformational moment in the history of the NRA.

The NRA’s day-to-day business operations will continue uninterrupted.

This proven mechanism is a positive for us, allowing our advisors to pursue strategic advantages for the NRA as our leadership team continues to advance our mission.

We will continue to promote our Second Amendment advocacy, firearms education and training, and public endeavors. We do not anticipate any measurable impacts to our staffing, public programs or Second Amendment advocacy.

We are forming a special committee to study the possibility of relocating key segments of our business operations to Texas or other states.

A new committee, under the direction of First Vice President Charles Cotton, will study opportunities for relocating segments of NRA business operations to Texas or other states. We are exploring any option that may work in the best interests of the NRA and its members.

In the meantime, the NRA’s general business operations will remain in Fairfax.

Building Our Strengths

I have added Marschall Smith as our Chief Restructuring Officer. Marschall is a former Senior Vice President and General Counsel of 3M Company and ADM, among others, and has more than 35 years of legal and business experience with an emphasis on compliance, corporate finance, and corporate governance.

A native Texan, Marschall served 10 years as a Marine Corps officer, including four years of active duty with combat service in Vietnam. He left the Marines with the rank of major. He was a member of the Carter/Mondale presidential transition team and served as a special assistant to the Director Designate of Central Intelligence. He received his bachelor’s degree, cum laude, from Princeton, followed by a Juris Doctor degree from The University of Virginia and an MBA from The University of Chicago.

Marschall will work closely with the NRA senior leadership team. I know he looks forward to meeting all of you – as we embark upon this journey together.

Do not believe everything you hear in the media. We fully expect our adversaries to try to gain some sort of perceived advantage over the NRA by mischaracterizing this strategic plan. They will portray a so-called “bankruptcy” as a negative and, once again, predict our demise.

The liberal media, anti-gun gadflies, and left-wing politicians will desperately try to advance another distorted truth about the NRA.


The NRA is financially strong and well-positioned on all fronts. I am confident our members, employees, and most loyal stakeholders will appreciate the extraordinary benefits of this plan and realize the value of the NRA charting its own path forward – on its own terms. (We are making immediate outreach to our members, instructors, donors, and other key stakeholders.)

Again, this plan allows us to streamline our legal and business affairs, escape a radicalized New York political environment, and position ourselves for the long-term. It is the first step of an ambitious and exciting blueprint for the future.

We will stay in regular communication with the board. In the meantime, please visit www.nra.org/forward for more information. If you receive any public inquiries, please refer them to Andrew Arulanandam, managing director of NRA Public Affairs, at aarulanandam@nrahq.org.

Thanks in advance for your loyalty and partnership. I’m confident we have never been better positioned in the history of our organization – or more prepared to keep winning the fight for freedom.

Wayne

I think much of the Board was caught unawares by this legal move. My legal sources are casting some doubt that this will end the case in New York unlike the impression given by the happy, rah-rah tone of the letter and other press releases.